HB477 Alabama 2020 Session

Relating to the City of Tuscaloosa in Tuscaloosa County; to amend Act 99-568 of the 1999 Regular Session (Acts 1999, p. 1220), as amended, providing for a retirement system for police officers and firefighters; to amend Section 6.03 relating to member contributions, to phase in an increase in the percentage of member contributions; to amend Section 6.05 relating to city contributions, to phase in an increase in the percentage of city contributions; to amend Section 7.01 relating to the membership of the Police and Fire Pension Board, to remove the chief of the fire department and chief of the police department from membership on the board and provide for the appointment of the chief financial officer, an appointment by the mayor, and an additional active police officer and firefighter on the board, increasing the membership from 11 to 13, and to provide for the special election of the same; to specify that the chair shall be selected from the elected members of the board; to amend Sections 7.02 and 7.03 to increase the length of the terms of office of active and retired police officer and firefighter members of the board from three to four years; to provide further for the duties of the treasurer; to amend Section 7.04 relating to the duties of the board, to provide further for the investment strategy; to amend Section 7.06 to increase the HB477 quorum of the board for transacting business from seven to nine members; and to add Article 11 to Act 99-568 of the 1999 Regular Session (Acts 1999, p. 1220), as amended, to establish a temporary task force to provide long term recommendations to the city, the board, and the local legislative delegation on or before June 1, 2021

Section 1

Sections 6.03 and 6.05 of Act 99-568 of the 1999 Regular Session (Acts 1999, p. 1220), as last amended by Act 2015-331 of the 2015 Regular Session (Acts 2015, p. 1011); Sections 7.01, 7.02, and 7.03 of Act 99-568 of the 1999 Regular Session (Acts 1999, p. 1220); Section 7.04 of Act 99-568 of the 1999 Regular Session (Acts 1999, p. 1220), as last amended by Act 2013-436 of the 2013 Regular Session (Acts 2013, p. 1745), and Section 7.06 of Act 99-568 of the 1999 Regular Session (Acts 1999, p. 1220), are amended to read as follows: "§6.03 Member Contributions. "(a) Prior to the effective date of Act 99-568 September 1, 1999, from the salary of each firefighter and police officer there shall be deducted and paid into the fund an amount equal to seven percent (7%) of the amount of such salary. "(b) Beginning with the effective date of this amendatory act October 1, 2015, or as soon thereafter as HB477 practical, from the salary of each firefighter and police officer the city shall agree to assume and pay "picked up" member contributions to the fund in lieu of direct contributions by the member in an amount equal to eleven and fifty hundredths percent (11.50%) of the amount of such salary (excluding bonuses and other extra pay and benefits) with such contributions being paid into the fund on behalf of the member. Beginning on October 1, 2020, and each October thereafter, up to and including October 1, 2022, the amount of the "picked up" member contributions shall increase by fifty hundredths percent (.50%) annually. "Member contributions picked up by the city shall be payable from the same source of funds used to pay compensation to a member. A deduction shall be made from a member's salary equal to the amount of contributions picked up by the city. This deduction shall not reduce the member's salary, pension base, or final average salary. No member shall have the option of choosing to receive the contributed amounts directly instead of having them paid by the city directly to the fund. All such contributions by the city shall be deemed and considered as part of the member's accumulated contributions and subject to all provisions of this plan pertaining to accumulated contributions of members, but treated as city contributions in determining tax treatment under the Code. The HB477 intent of this language is to comply with Section 414(h)(2) of the Internal Revenue Code of 1986, as amended. "(c) Notwithstanding the provisions of 6.03(a) and 6.03(b), whenever a member of the fire or police department of the city is ineligible for membership in the fund by reason of the provisions of this act, neither such ineligible member nor his or her salary nor other compensation shall be subject to any assessment for the benefit of this fund. "§6.05 City Contributions (non picked-up). "The governing body of the city shall cause to be paid into the fund out of the treasury of the city an amount equal to thirteen and fifty hundredths percent (13.50%) of the salary (excluding bonuses) of each member of the fire and police department who is eligible for membership in this fund, such payment to be made to the fund as and when such salary becomes payable, and deduction therefrom is made as provided in this section. Beginning on October 1, 2020, and each October 1 thereafter, up to and including October 1, 2022, the amount paid into the fund out of the treasury of the city shall increase by one percent (1%) annually. "§7.01 Appointment of Board. "(a) The board is responsible for the general administration of the plan and for carrying out the provisions of the plan. The board shall consist of eleven 13 members, as follows: (i) one member appointed by the Tuscaloosa City HB477 Council to serve a term concurrent with the terms of the members of the city council, who may be an employee of the city but not an employee of the police or fire department, (ii) the chief of the fire department chief financial officer of the city, (iii) the chief of the police department one member appointed by the mayor, (iv) three additional four members from the fire department, (v) three additional four members from the police department, (vi) one retired firefighter, and (vii) one retired police officer. The member appointed by the mayor pursuant to (iii) shall serve a four-year term of office commencing June 1, 2020. The board shall elect a chairperson from among the elected members on an annual basis. The members of the Board of Trustees of the Firemen's and Policemen's Pension and Relief Fund created pursuant to Act No. 328 of the Alabama Legislature of 1959 (Acts 1959, p. 907), as amended, shall continue to serve as members of the board created by this the act amending this subsection until otherwise provided in 7.02 or 7.03. "(b) There shall be a secretary of the board, whose duties shall be, except as otherwise provided by this act, as follows: "Attend and take the minutes of official meetings and actions of the board, prepare resolutions to be considered or enacted by the board, maintain a record of those members or eligible beneficiaries receiving benefits from the plan, HB477 maintain a list of all members of the plan (reflecting the date(s) of employment by the city, periods of employment, breaks in service), maintain written communications of the board, written requests from members for benefits and election of benefits (provided, however, it shall be the responsibility of the board to provide to the secretary the appropriate form or forms for members and/or their eligible beneficiaries to make elections of benefits and requests for payment of benefits). "(c)(1) There shall be a treasurer of the board, whose duties, except as otherwise provided by this act, shall be as follows: Maintain. In addition to other duties provided by this act and by the board pursuant to subdivision (2), the treasurer shall maintain the financial records of the fund (not investment portfolios or records or reports thereof) regarding the amount paid each month to members and eligible beneficiaries, maintain records of the board regarding payments and receipts of the board in its normal course of business, receive and deposit all money belonging to the fund or coming into his or her hands as treasurer for and on behalf of the fund, maintain records of all accounts established by the board with financial institutions as depositories approved by the board, determine the monthly balances of the funds therein and interest received thereon, prepare checks or warrants in the amounts and to the persons or entities in the HB477 amounts and from the accounts designated by the board and present them to the appropriate officials of the board for execution, calculate and distribute federal and/or state income tax forms to members and eligible beneficiaries associated with payments from the fund, prepare monthly 941 reports, provide financial information within his or her possession or control as treasurer to auditors, accountants, actuaries and other consultants employed or retained by the board, provided, however, nothing herein shall require or obligate the treasurer of the fund to be qualified as a certified public accountant nor to perform services to or on behalf of the board traditionally performed by or in the nature of auditing the finances or accounts of the fund, an accountant, an actuary or investment counselor or advisor. "(2) Additional duties of the treasurer may be determined by a three-fourths vote of the membership of the board, subject to approval by the governing body of the city. "(d) The city shall provide secretary and treasurer services to the board as herein defined through one or more of its employees and/or by independent contract, as it deems appropriate. The board may, by resolution duly enacted, request the city relinquish all or any portion of the performance of either or both of such services or any other function required of the city or any of its officers, agents or employees pursuant to this act, except that of board member HB477 members. The city may then elect to relinquish such services or function by resolution duly enacted by the city council. Provided, however, upon the relinquishment of any such service or function, and subject to the terms and conditions agreed upon between the parties as set forth in their respective resolutions, the city shall be relieved of the performance of the same unless reassumed by corresponding action of the board and the city council. "§7.02 Election of Active Police Officers and Firefighters. "(a) The three four members of the board described in 7.01(a)(v) above shall be elected from among their number by the police officers who are entitled to vote in such election and the three four members of the board described in 7.01(a)(iv) above shall be elected from among their number by the firefighters who are entitled to vote in such election. Neither the chief of police nor the chief of the fire department shall be entitled to vote in such elections. "(b) The members of the board who have been elected and are serving as described in 7.01(a)(iv) and 7.01(a)(v) at the effective date of this act on September 1, 1999, shall serve until the next scheduled regular election for such respective member. Such elections shall be held on the second Tuesday, Wednesday, and Thursday in January, with each member serving a staggered three-year term, beginning with the year HB477 2001. Commencing on the effective date of the act amending this subsection, as terms on the board expire under this section, successors to those positions, and the two additional active members added by the act amending this subsection, shall be elected to serve four-year terms. The board shall hold special elections for the two additional active members, with the terms for the same to be staggered to meet a normal four-year term ending in January 2024. All such elections shall be held independently of one another and shall be held at police headquarters for the police department and at fire station number one for the fire department, or some other place duly designated by the board, beginning at eight o'clock in the forenoon and continuing until five o'clock in the afternoon. "(c) Only police officers and firefighters who are eligible to become members of the plan and to participate in the benefits as herein provided shall be entitled to vote in such elections. Voting shall be by secret ballot. "(d) The city clerk or his or her designee shall prepare the ballots which shall be printed, typewritten, mimeographed, or reproduced by other means. He or she shall place on said ballots the names only of those nominated as candidates as herein provided and the names of such as may request in writing that their own names be placed thereon as nominees. Any three members of the fire department eligible to HB477 vote in such election may nominate in writing a candidate willing to serve from the fire department, and any three members of the police department eligible to vote in such election may nominate in writing a candidate willing to serve from the police department. Such nominations and such requests from persons entitled to vote in said election that their own names be placed in nomination on such ballot shall be filed with the city clerk or his or her designee not earlier than two weeks before the date of such election and not later than five o'clock in the afternoon of Thursday immediately preceding such election. "(e) The candidate receiving a majority of the votes cast in an election shall hold office as a board member for a term of three four years beginning on the Monday next following that election and until a successor is elected and must accept by notifying the chairperson of the board of such acceptance. If no candidate receives a majority of the votes cast, a runoff election will be held between the two candidates receiving the highest numbers of votes. If no candidate receives a majority of the votes cast, and two or more candidates receive the same number of votes for purposes of joining the runoff election, then the chairperson of the board shall forthwith determine by lot from the persons so receiving such equal number of votes who shall be included in the runoff election. HB477 "(f) The chief of the police department and one police officer selected by him or her and the chief of the fire department and one firefighter selected by him or her shall act as election officials in their respective departments and, on the last election day immediately after the casting of such ballots, shall canvass and count the same for their respective departments and certify in writing in duplicate the number of ballots cast and the number of ballots received by each candidate. After signing such certificates, each chief shall immediately post one copy thereof at the place of election and not later than twelve o'clock noon on the following day deliver one copy thereof together with all the ballots cast by his or her department, in a securely sealed envelope, to the chairperson of the board who shall on the day following said election in the presence of the chief of such fire department and the chief of such police department, open said envelopes, examine said certificates and ascertain and determine the total number of ballots cast at said election for each of the candidates, and shall issue certificates of election to the candidates receiving the highest number of votes as aforesaid. In case any two candidates shall have received the same number of votes in a runoff election, so that there would be no choice under the foregoing provisions, then the chairperson of the board shall forthwith determine by lot from the persons so receiving such HB477 equal number of votes who shall be the trustee. No election shall be set aside for want of formality in balloting by such members, or in certifying or transmitting returns of such election by the officer or persons in charge thereof. "(g) Should a vacancy occur in the position of an elected member of the board as described in 7.01(iv) or 7.01 (v), such vacancy shall, with reasonable promptness, shall be filled for the unexpired term from the department in which the vacancy exists, by means of a special election. "§7.03 Election of Retired Police Officers and Firefighters. "(a) The member of the board described in 7.01(vii) above shall be elected from among their number by the retired police officers who are entitled to vote in such election and the member of the board described in 7.01(vi) above shall be elected from among their number by the retired firefighters who are entitled to vote in such election. "(b) The members of the board who have been elected and are serving as described in 7.01(vi) and 7.01(vii) at the effective date of this act on September 1, 1999, shall serve until the next scheduled regular election for these members. Such election shall be held on the second Tuesday, Wednesday, and Thursday in January of every third year, beginning with the year 2002. Commencing on the effective date of the act amending this subsection, as terms on the board expire under HB477 this section, successors to those positions shall be elected to serve four-year terms. All such elections shall be held independently of one another and shall be held at police headquarters for retired police officers and at fire station number one for retired firefighters, or some other place duly designated by the board, beginning at eight o'clock in the forenoon and continuing until five o'clock in the afternoon. "(c) Only retired police officers and firefighters who are receiving a benefit from the fund as herein provided shall be entitled to vote in such elections. Voting shall be by secret ballot. "(d) The city clerk or his or her designee shall prepare the ballots which shall be printed, typewritten, mimeographed, or reproduced by other means. He or she shall place on said ballots the names only of those nominated as candidates as herein provided and the names of such as may request in writing that their own names be placed thereon as nominees. Any three retired members of the fire department eligible to vote in such election may nominate in writing a candidate willing to serve from the retired members of the fire department, and any three retired members of the police department eligible to vote in such election may nominate in writing a candidate willing to serve from the retired members of the police department. Such nominations and such requests from persons entitled to vote in said election that their own HB477 names be placed in nomination on such ballot shall be filed with the city clerk or his or her designee not earlier than two weeks before the date of such election and not later than five o'clock in the afternoon of Thursday immediately preceding such election. "(e) The candidate receiving a majority of the votes cast in an election shall hold office as such board member for a term of three four years beginning on the Monday next following that election and until his or her successor is elected and he or she must accept by notifying the chairperson of the board of such acceptance. If no candidate receives a majority of the votes cast, a runoff election will be held between the two candidates receiving the highest numbers of votes. If no candidate receives a majority of the votes cast, and two or more candidates receive the same number of votes for purposes of joining the runoff election, then the chairperson of the board shall forthwith determine by lot from the persons so receiving such equal number of votes who shall be included in the runoff election. "(f) The chief of the police department and one retired police officer selected by him or her and the chief of the fire department and one retired firefighter selected by him or her shall act as election officials in their respective departments and, on the last election day immediately after the casting of such ballots, shall canvass and count the same HB477 for their respective departments and certify in writing in duplicate the number of ballots cast and the number of ballots received by each candidate. After signing such certificates, each chief shall immediately post one copy thereof at the place of election and not later than twelve o'clock noon on the following day deliver one copy thereof together with all the ballots cast by his or her department, in a securely sealed envelope, to the chairperson of the board who shall on the day following said election in the presence of the chief of such fire department and the chief of such police department, open said envelopes, examine said certificates and ascertain and determine the total number of ballots cast at said election for each of the candidates, and shall issue certificates of election to the candidates receiving the highest number of votes as aforesaid. In case any two candidates shall have received the same number of votes in a runoff election, so that there would be no choice under the foregoing provisions, then the chairperson of the board shall forthwith determine by lot from the persons so receiving such equal number of votes who shall be the trustee. No election shall be set aside for want of formality in balloting by such members, or in certifying or transmitting returns of such election by the officer or persons in charge thereof. "(g) Should a vacancy occur in the position of an elected member of the board as described in 7.01(vi) or 7.01 HB477 (vii), such vacancy shall, with reasonable promptness, shall be filled for the unexpired term from retired members of the department in which the vacancy exists, by means of a special election. "7.04 Duties of the Board. "(a) The members of the board shall annually elect a chairperson from their number; may appoint from their number such subcommittees with such powers as they shall determine; may authorize one or more of their number or any agent to execute or deliver any instrument or make any payment on their behalf; may retain counsel, employ agents, and provide for such clerical, accounting, actuarial, financial, and consulting services as they may require in carrying out the provisions of the plan; and may allocate among themselves or delegate to other persons all or such portion of their functions under the plan subject to proper supervision and accountability, as they, in their sole discretion, shall decide. The board shall authorize an audit of the fund to be made by an independent accountant at least once every year. The board shall authorize an actuarial study to be made of the fund at least once every other year by the plan actuary, where such study is based upon reasonable actuarial assumptions and methods as determined by the plan actuary. "(b) The board shall appoint a financial institution (which may be a bank or trust company or other financial HB477 institution) as a depository and the treasurer of the fund shall promptly deposit all money belonging to the fund or coming into his or her hands as treasurer thereof in the depository. If any of the funds are dissipated or lost by reason of the insolvency or failure of the financial institution appointed as the depository as provided herein, the dissipation or loss shall not constitute a liability on the official bond of the chief financial officer of the city and/or or the treasurer of the fund, or both, nor a liability against the sureties thereon. All interest received on the deposits shall become a part of the fund. "(c) The board after considering the probable demands upon the fund, may invest such portion of it as may be safely withdrawn for the purpose. The board may employ investment counselors and agents to invest and manage such portions of the fund as the board may direct. Of that portion of the fund which the board has determined to be available for investment, not less than 30 percent shall be invested, or held for investment, in interest bearing bonds or securities of the United States of America, bonds of any state in the United States, any bonds lawfully issued by municipalities in the United States, or invested in any insured savings and loan association to the extent that such investment is insured by the Federal Savings and Loan Insurance Corporation; or invested in any commercial bank to the extent such investment HB477 is insured by the Federal Deposit Insurance Corporation; not exceeding 70 percent of the money deemed available for investment may be invested in corporate stocks and bonds. The board, by a three-fourths vote of the membership of the board, may invest up to 10 percent of the money deemed available for investment in alternative investments. All income from investments shall be and become a part of the fund. All securities belonging to the fund shall be deposited with the treasurer of the fund, or in the event that a financial agent has been employed, may be held by the financial agent and shall be subject to the direction and control of the board. "(d) On or before the first day of February of each year, the board shall make a written report to the mayor and city council, and to the fire department and the police department in the city, of the condition of the fund as of December 31st of the preceding year. "§7.06 Meetings. "(a) The board shall meet not less than once each month and at such other times as may be considered necessary by the chairperson or any two other members of the board. All meetings shall be upon such notice, at such place or places, and at such time or times as the board may from time to time determine. Seven Nine members of the board shall constitute a quorum for the transaction of business. Board members must be present to vote; no proxies shall be allowed. Each board HB477 member shall have one vote. Action shall be taken if approved by the affirmative vote of at least seven members. "(b) The board shall keep separate and adequate records of all its meetings and proceedings. The records shall be public and shall be subject to inspection during normal business hours to the extent required by Alabama law. "(c) The city shall make available to the board within one of its facilities or buildings, a conference room to be utilized by the board for the purpose of conducting its monthly or special meetings. The use of any such conference room shall be subject to reasonable advance notice to the appropriate city official and availability."

Section 2

Article 11 is added to Act 99-568 of the 1999 Regular Session (Acts 1999, p. 1220), as amended, to read as follows: §11.01. Creation of task force. There is created a temporary advisory task force. The task force shall do all of the following: (1) Review, analyze, and provide a report on the economic health and sustainability of the fund based upon actuarial valuations and updated assumptions. (2) Explore the administrative and governance structure of the existing fund. (3) Provide a comprehensive report that outlines a plan with a menu of options to achieve a fully funded pension HB477 plan to the board, the city, and each member of the local legislative delegation. (4) Explore all viable pension conversions and modifications. (5) Explore all state funding mechanisms currently received or available, or both, to the city that may provide a legal source of revenue for the fund. §11.02. Composition of task force. (a) The task force shall consist of seven regular members and three ex officio members. The seven regular members shall include all of the following: (1) Four members representing the city, two appointed by the city council and two appointed by the mayor. (2) Two members representing the board, appointed by the board. (3) One member representing the local legislative delegation, appointed by the membership of the local legislative delegation. (b) Members representing the city shall have experience in one or more of the following areas: Public or private pension funds, legal, business administration, finance administration, or public administration. (c) The three ex officio members shall include all of the following: (1) The mayor, or his or her designee. HB477 (2) The chair of the local legislative delegation, or his or her designee. (3) The chair of the board, or his or her designee. §11.03. Professional services provided by city. The city shall provide funding for professional services directed to the accomplishment of the objectives of the task force, subject to the approval of the mayor and city council and reasonableness and public purpose requirements and standards. §11.04. Timeliness of duties of task force. Reports of the task force shall be completed no later than June 1, 2021, at which time the task force shall be dissolved. No recommendation of the task force shall become a requirement for action by any entity and all actions of the task force are subject to the Alabama Open Meetings Act and applicable public records laws.

Section 3

This act shall become effective on the first day of the third month following its passage and approval by the Governor, or its otherwise becoming law. HB477 Speaker of the House of Representatives President and Presiding Officer of the Senate House of Representatives I hereby certify that the within Act originated in and was passed by the House 06-MAY-20. Jeff Woodard Clerk Senate 09-MAY-20 Passed